Pakistan Sees $262 Million Drop in Weekly Forex Reserves

Pakistan Sees $262 Million Drop in Weekly Forex Reserves

Karachi, January 23, 2025 – The foreign exchange reserves of Pakistan have registered a decline of $262 million during the week ending January 17, 2025. The decrease underscores the ongoing challenges faced by the country in maintaining its external financial stability.

According to the latest data released by the State Bank of Pakistan (SBP), the nation’s total net foreign exchange reserves dropped to $16.189 billion as of January 17, 2025, compared to $16.451 billion recorded on January 10, 2025. This decline highlights the financial pressures stemming from external obligations and other economic factors.

The SBP reported that the reserves under its custody experienced a sharper dip, falling by $276 million to settle at $11.449 billion by the end of the reviewed week. In the preceding week, the reserves held by the central bank were recorded at $11.725 billion. This reduction has been attributed primarily to external debt repayments made by the government of Pakistan.

While the reserves held by the SBP declined, there was a marginal increase in foreign exchange reserves maintained by commercial banks. These reserves rose by $14 million, reaching $4.74 billion by January 17, 2025, compared to $4.726 billion a week earlier. This slight improvement provides some relief amid broader challenges.

The drop in Pakistan’s foreign exchange reserves comes at a time when the country is grappling with significant economic hurdles, including a rising debt burden and a volatile currency market. The persistent outflows related to external debt servicing continue to weigh heavily on Pakistan’s foreign exchange position, raising concerns about the sustainability of its economic policies.

Efforts to bolster Pakistan’s foreign exchange reserves remain critical to ensure economic stability. Policymakers are expected to explore avenues for attracting foreign investment, securing financial assistance from international partners, and promoting exports to counterbalance the pressure on reserves.

As Pakistan navigates these financial challenges, the stability of its foreign exchange reserves will play a pivotal role in shaping the country’s economic outlook in the coming months. Strengthening foreign reserves remains an essential priority to safeguard Pakistan’s financial health and sustain its economic growth trajectory.